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25 Apr 2013

Here's what the established car manufacturers are doing to capture the Chinese market

Car manufacturers are falling over themselves to please the Chinese, and it's no wonder. The population of China is 1.35 billion, 240 million Chinese were born in the 80s and annual economic growth has hovered around 10% for years.

The middle classes in China have grown to 100 million and there are 1 million UK equivalent millionaires. And 130 US dollar billionaires. In 2011 18,900,000 cars were sold in China compared to 12,778,171 in the US and 1,941,253 in the UK.

Which means they are buying more cars. The Chinese home-grown (and often state owned) manufacturers can supply a certain amount of the Chinese growth in car ownership, but not all. And with more money and freedom of choice, in what is still a communist country, Western manufacturers can satisfy an increasing demand for individuality - and beauty - from Chinese consumers.

So we see the familiar (to us in the west) car manufacturers pushing their product like hell at the Shanghai Motor Show. We are seeing joint ventures with Chinese companies and we are seeing China specific models.

Jaguar Land Rover saw sales in China increase by 60% over the course of 2011, and by more than 80% in 2012. JLR will be opening a manufacturing plant in China in conjunction with Chery, a state owned Chinese manufacturer.

The Ford Focus, recently announced as the world's bestselling car, was helped to that title by a 50% increase in sales in China. Ford are one of many manufacturers introducing models specific to the Chinese market. In Ford's case that model is the new Ford Escort - an iconic name in the UK and, as it turns out, in China which loves the old model so much Ford deigned to revive the name for a new saloon that sits between the Focus and Fiesta.

Nissan's attempt to capture the Chinese market is the Friend-me which, if it were a film, would be the ultimate high-concept movie. According to Nissan, Chinese in their 20s (the target market) have no siblings so like to be with their friends but also to have their own individual space. So they've designed a car with room for four but that gives each occupant their own space. Maybe by accident they've also designed the best looking Nissan ever made - strange for a market normally so conservative.

Amongst the many manufacturers on display in Shanghai is MG who's MG CS concept (known as the MG3 in the UK) is hugely important for the resurgent British br, now in Chinese hands. The MG6 hasn't really been the success many hoped for, despite being a good car, and, with the premium mini-SUV sector chasing after the market share created by the Range Rover Evoque, MG have high hopes for it's first brand new car in two years.